The GAAP column of the table contains the financial highlights
of the full year 2018 under ASC 606 with the comparison period
under ASC 605.

The non-GAAP column of the table contains the financial
highlights of the full year 2018 under ASC 605 with the comparison
period under ASC 605.

Fourth Quarter 2018 Financial Highlights

GAAP

Non-GAAP

Record revenue of $411 million, growth of 5% year-over-year

Record revenue of $420 million, growth of 6% year-over-year

Cloud revenue of $132 million, growth of 30% year-over-year

Cloud revenue of $134 million, growth of 29% year-over-year

Gross margin of 66.9% compared to 68.4% last year

Gross margin of 72.4% compared to 74.2% last year

Operating income of $70 million compared to $63 million last year

Record operating income of $119 million compared to $112 million
last year

Operating margin of 17.1% compared to 16.1% last year

Operating margin of 28.3% compared to 28.4% last year

Diluted EPS of $0.98 versus $1.27 last year

Record diluted EPS of $1.47 versus $1.35 last year

Cash flow from operations of $109 million, 26% growth
year-over-year

The GAAP column of the table contains the financial highlights
of the fourth quarter 2018 under ASC 606 with the comparison
period under ASC 605.

The non-GAAP column of the table contains the financial
highlights of the fourth quarter 2018 under ASC 605 with the
comparison period under ASC 605.

“We are pleased to end the year on a high note as 2018 was a year marked
by robust growth and record results,” said Barak Eilam, CEO of NICE.
“For the full-year 2018, we reported strong growth in cloud revenue and
operating income, an increase in recurring revenue, further growth in
the operating margin and a record year for cash flow generation.”

Mr. Eilam continued, “We are stepping into 2019 with great momentum
across all of our businesses fueled by our two market differentiating
platforms – CXone for Customer Engagement and X-Sight for Financial
Crime and Compliance. Our assets, investments and market leadership in
cloud, analytics and artificial intelligence are driving us forward and
providing tremendous future opportunities.

“As we look ahead to the next five years, our strong leadership position
will allow us to quickly expand into a total addressable market of over
$12 billion from $7 billion today, providing us the opportunity to far
exceed the $2 billion revenue mark, to see the majority of our revenue
come from the cloud and to have a greater than 30% operating margin.”

NICE Investor Day

NICE will be hosting its Investor Day on April 16th in conjunction with
its Interactions annual user conference in Las Vegas. The special
program for analysts and investors will include meetings with NICE
executives, presentations from customers, product and technology
sessions, and access to the solutions showcase. If you haven’t
registered, please email NICE at [email protected].

GAAP Financial Highlights for the Fourth Quarter and Full Year
Ended December 31:

The GAAP numbers presented below for the fourth quarter and full year
2018 are under ASC 606 and the comparison period GAAP numbers for the
fourth quarter and full year 2017 are under ASC 605.

Revenues: Fourth quarter 2018 total revenues increased 4.7% to
$410.8 million compared to $392.2 million for the fourth quarter of 2017.Full
year 2018 total revenues increased 8.4% to $1,444.5 million compared to
$1,332.2 million for the full year 2017.

Gross Profit: Fourth quarter 2018 gross profit increased to
$274.7 million compared to $268.3 million for the fourth quarter of 2017
and fourth quarter 2018 gross margin was 66.9% compared to 68.4% for the
fourth quarter of 2017.Full year 2018 gross profit and gross
margin increased to $947.7 million and 65.6%, respectively, compared to
$863.5 million and 64.8%, respectively, for the full year 2017.

Operating Income: Fourth quarter 2018 operating income and
operating margin increased to $70.4 million and 17.1%, respectively,
compared to $63.2 million and 16.1%, respectively, for the fourth
quarter of 2017.Full year 2018 operating income and operating
margin increased to $197.6 million and 13.7%, respectively, compared to
$150.1 million and 11.3%, respectively, for the full year 2017.

Net Income: Fourth quarter 2018 net income and net income margin
were $62.3 million and 15.2%, respectively, compared to $79.4 million
and 20.2%, respectively, for the fourth quarter of 2017.Full year
2018 net income and net income margin increased to $159.3 million and
11.0%, respectively, compared to $143.3 million and 10.8%, respectively,
for the full year 2017.

Fully Diluted Earnings Per Share: Fully diluted earnings per
share for the fourth quarter of 2018 was $0.98 compared to $1.27 in the
fourth quarter of 2017.Fully diluted earnings per share for the
full year 2018 increased to $2.52 compared to $2.31 for the full year
2017.

Operating Cash Flow and Cash Balance: Fourth quarter 2018
operating cash flow was $108.9 million and full year operating cash flow
reached $396.6 million. In the fourth quarter, $15.4 million was used
for share repurchases and $26.0 million was used for share repurchases
for the full year of 2018. As of December 31, 2018, total cash and cash
equivalents, short term investments and marketable securities were
$730.8 million, and total debt was $456.0 million.

Non-GAAP Financial Highlights for the Fourth Quarter and Full Year
Ended December 31:

The non-GAAP numbers presented below for the fourth quarter and full
year 2018 and the comparison period non-GAAP numbers for the fourth
quarter and full year 2017 are both under ASC 605.

Revenues: Fourth quarter 2018 non-GAAP total revenues increased
to $419.9 million, up 6.1% from $395.8 million for the fourth quarter of
2017.Non-GAAP total revenues for the full year 2018 increased 8.7%
to $1,462.7 million compared to $1,345.9 million for the full year 2017.

Gross Profit: Fourth quarter 2018 non-GAAP gross profit increased
to $303.8 million compared to $293.5 million for the fourth quarter of
2017. Fourth quarter 2018 Non-GAAP gross margin was 72.4% compared to
74.2% for the fourth quarter of 2017.Full year 2018 non-GAAP gross
profit increased to $1,040.6 million compared to $963.5 million and full
year 2018 non-GAAP gross margin was 71.1% compared to 71.6% for the full
year 2017.

Operating Income: Fourth quarter 2018 non-GAAP operating income
increased to $118.7 million compared to $112.4 million for the fourth
quarter of 2017. Fourth quarter 2018 Non-GAAP operating margin was 28.3%
compared to 28.4% for the fourth quarter of 2017.Full year 2018
non-GAAP operating income and non-GAAP operating margin increased to
$378.6 million and 25.9%, respectively, from $336.3 million and 25.0%,
respectively, for the full year 2017.

Net Income: Fourth quarter 2018 non-GAAP net income and non-GAAP
net income margin increased to $93.9 million and 22.4%, respectively,
from $84.5 million and 21.3%, respectively, for the fourth quarter of
2017.Full year 2018 non-GAAP net income and non-GAAP net income
margin increased to $296.7 million and 20.3%, respectively, from $254.5
million and 18.9%, respectively, for the full year 2017.

Fully Diluted Earnings Per Share: Fourth quarter 2018 non-GAAP
fully diluted earnings per share increased 8.9% to $1.47, compared to
$1.35 for the fourth quarter of 2017.Full year 2018 non-GAAP fully
diluted earnings per share increased 14.4% to $4.69 compared to $4.10
for the full year 2017.

First Quarter and Full Year 2019 Guidance:

Effective January 1st, 2018, the company
adopted ASC 606 using the modified retrospective method for GAAP
reporting purposes. Starting in January 2019 the guidance, as well as
our financial results, will be provided using the accounting standard
ASC 606 for all 2019 quarters and the full year 2019. Comparative
results throughout 2019 will be compared to ASC 606 results for 2018.

First Quarter 2019: First quarter 2019 non-GAAP total revenues
are expected to be in a range of $370 million to $380 million (2018
non-GAAP: $337.6 million). First quarter 2019 non-GAAP fully diluted
earnings per share are expected to be in a range of $1.05 to $1.15 (2018
non-GAAP: $0.97).

Full Year 2019: Full year 2019 non-GAAP total revenues are
expected to be in a range of $1,558 million to $1,582 million (2018
non-GAAP: $1,453.4 million). Full year 2019 non-GAAP fully diluted
earnings per share are expected to be in a range of $5.08 to $5.28 (2018
non-GAAP: $4.75).

Quarterly Results Conference Call

NICE management will host its earnings conference call today, February 14th,
2019 at 8:30 AM ET, 13:30 GMT, 15:30 Israel, to discuss the results and
the company’s outlook. To participate in the call, please dial in to the
following numbers: United States 1-866-804-8688 or +1-718-354-1175,
International +44(0)1296-480-100, United Kingdom 0-800-783-0906, Israel
1-809-344-364. The Passcode is 990 622 84. Additional access numbers can
be found at http://www.btconferencing.com/globalaccess/?bid=54_attended.
The call will be webcast live on the Company’s website at http://www.nice.com/news-and-events/ir-events.
An online replay will also be available approximately two hours
following the call. A telephone replay of the call will be available for
7 days after the live broadcast, and may be accessed by dialing: United
States 1-877-482-6144, International +44(0)20-7136-9233, United Kingdom
0-800-032-9687. The Passcode for the replay is 635 176 28.

Non-GAAP financial measures consist of GAAP financial measures adjusted
to exclude: amortization of acquired intangible assets, share-based
compensation, certain business combination accounting entries,
amortization of discount on long term debt, re-organization expenses,
tax adjustment re non-GAAP adjustments and tax reform and ASC 606 to ASC
605 adjustments. The purpose of such adjustments is to give an
indication of our performance exclusive of non-cash charges and other
items that are considered by management to be outside of our core
operating results. Our non-GAAP financial measures are not meant to be
considered in isolation or as a substitute for comparable GAAP measures,
and should be read only in conjunction with our consolidated financial
statements prepared in accordance with GAAP. Our management regularly
uses our supplemental non-GAAP financial measures internally to
understand, manage and evaluate our business and make operating
decisions. These non-GAAP measures are among the primary factors
management uses in planning for and forecasting future periods. Business
combination accounting rules requires us to recognize a legal
performance obligation related to a revenue arrangement of an acquired
entity. The amount assigned to that liability should be based on its
fair value at the date of acquisition. The non-GAAP adjustment is
intended to reflect the full amount of such revenue. We believe this
adjustment is useful to investors as a measure of the ongoing
performance of our business. We believe these non-GAAP financial
measures provide consistent and comparable measures to help investors
understand our current and future operating cash flow performance. These
non-GAAP financial measures may differ materially from the non-GAAP
financial measures used by other companies. Reconciliation between
results on a GAAP and non-GAAP basis is provided in a table immediately
following the Consolidated Statements of Income.

About NICENICE (Nasdaq: NICE) is the worldwide leading
provider of both cloud and on-premises enterprise software solutions
that empower organizations to make smarter decisions based on advanced
analytics of structured and unstructured data. NICE helps organizations
of all sizes deliver better customer service, ensure compliance, combat
fraud and safeguard citizens. Over 25,000 organizations in more than 150
countries, including over 85 of the Fortune 100 companies, are using
NICE solutions. www.nice.com.

Trademark Note: NICE and the NICE logo are trademarks or
registered trademarks of NICE. All other marks are trademarks of their
respective owners. For a full list of NICE’ marks, please see: http://www.nice.com/nice-trademarks.

Forward-Looking StatementsThis press release contains
forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. In some cases, forward-looking
statements may be identified by words such as “believe,” “expect,”
“seek,” “may,” “will,” “intend,” “should,” “project,” “anticipate,”
“plan,” and similar expressions. Forward-looking statements are based on
the current beliefs, expectations and assumptions of the Company’s
management regarding the future of the Company’s business, future plans
and strategies, projections, anticipated events and trends, the economy
and other future conditions. Examples of forward-looking statements
include guidance regarding the Company’s revenue and earnings and the
growth of our cloud, analytics and artificial intelligence business.

Forward looking statements are inherently subject to significant
economic, competitive and other uncertainties and contingencies, many of
which are beyond the control of management. The Company cautions that
these statements are not guarantees of future performance, and investors
should not place undue reliance on them. There are or will be important
known and unknown factors and uncertainties that could cause actual
results to differ materially from those expressed or implied in the
forward-looking statements. These factors, include, but are not limited
to, risks associated with competition, success and growth of the
Company’s cloud Software-as-a-Service business, cyber security attacks
or other security breaches against the Company, privacy concerns and
legislation impacting the Company’s business, the Company’s dependency
on fourth-party cloud computing platform providers, hosting facilities
and service partners, changes in general economic and business
conditions, rapidly changing technology, changes in currency exchange
rates and interest rates, difficulties in making additional acquisitions
or effectively integrating acquired operations, products, technologies
and personnel, successful execution of the Company’s growth strategy,
the effects of tax reforms and of newly enacted or modified laws,
regulation or standards on the Company and its products, and other
factors and uncertainties discussed in our filings with the U.S.
Securities and Exchange Commission (the “SEC”). You are encouraged to
carefully review the section entitled “Risk Factors” in our latest
Annual Report on Form 20-F and our other filings with the SEC for
additional information regarding these and other factors and
uncertainties that could affect our future performance. The
forward-looking statements contained in this presentation speak only as
of the date hereof, and the Company undertakes no obligation to update
or revise them, whether as a result of new information, future
developments or otherwise, except as required by law.

NICE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

U.S. dollars in thousands (except per share amounts)

Quarter ended

Year ended

December 31,

December 31,

2018

2017

2018

2017

Unaudited

Unaudited

Audited

Audited

Revenue:

Product

$

92,941

$

114,822

$

263,805

$

318,946

Services

186,073

175,947

719,531

652,040

Cloud

131,815

101,466

461,183

361,166

Total revenue

410,829

392,235

1,444,519

1,332,152

Cost of revenue:

Product

7,679

11,397

31,065

51,065

Services

59,087

59,128

229,671

225,020

Cloud

69,389

53,436

236,079

192,588

Total cost of revenue

136,155

123,961

496,815

468,673

Gross profit

274,674

268,274

947,704

863,479

Operating expenses:

Research and development, net

46,807

50,132

183,830

181,107

Selling and marketing

100,421

107,070

370,659

361,328

General and administrative

46,275

37,313

153,323

129,071

Amortization of acquired intangible assets

10,764

10,583

42,276

41,902

Total operating expenses

204,267

205,098

750,088

713,408

Operating income

70,407

63,176

197,616

150,071

Finance and other expense, net

1,829

3,698

10,901

20,411

Income before tax

68,578

59,478

186,715

129,660

Taxes on income (Tax benefits)

6,284

(19,910

)

27,377

(13,631

)

Net income

$

62,294

$

79,388

$

159,338

$

143,291

Basic earnings per share

$

1.01

$

1.30

$

2.60

$

2.37

Diluted earnings per share

$

0.98

$

1.27

$

2.52

$

2.31

Weighted average number of shares

outstanding used to compute:

Basic earnings per share

61,824

60,861

61,387

60,444

Diluted earnings per share

63,760

62,534

63,309

62,119

NICE LTD. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP RESULTS AND ASC 606 TO
NON-GAAP ASC 605